For students: 529 college savings plans- Any earnings are accumulated on a tax-deferred basis- As long as the money is used for qualified higher education expenses, you don't pay federal income tax when you withdraw the money.- Better than a savings account, Coverdell Education Savings Account (ESA), UTMA (uniform transfers to minors account) and UGMA (uniform gift to minors account) in most cases.- You can go to college in any state that offers the plan.- Up to $300,000 can be contributed (as opposed to just $2,000 for a Coverdell ESA).